REVIEW OF OPERATIONS
PARKER RANGE PROJECT
The Parker Range Project is located in the Southern Cross Greenstone Belt, immediately south of Marvel Loch and 80km north of Western Area’s Forrestania Nickel Operations. The project area comprises exploration tenure of approximately 500 km² prospective for gold and nickel and contains numerous historic gold mines.
The Southern Cross area is a well-recognized regional mining centre offering excellent established infrastructure and a long gold mining tradition. Historic production since 1906 when gold was first discovered in the region exceeds 12Mozs of gold and 1,100,000t of nickel.
Gondwana’s recent focus at Parker Range has been to transform historic gold deposits – Buffalo and Spring Hill (70% Gondwana) and Centenary (100% Gondwana) – into JORC compliant gold resources and explore nearby historic gold prospects with the aim of increasing total resources.
|Figure 1: Location of the Parker Range Project|
In mid-2010, Gondwana was successful in discovering additional gold resources at the Centenary gold project, 5km north of Buffalo. The Parker Range Gold Project, comprising the Buffalo, Spring Hill and Centenary deposits is now estimated to contain a total 101,350oz Au Mineral Resource (refer Appendix 1).
Gold Mining Project
The Company has been conducting mining studies for the Parker Range Gold Project with a view to establishing production on a toll treatment basis. The Parker Range Gold Project is a relatively small gold deposit but has the potential to be exploited for a low capital cost through the use of mining contractors and toll treatment at one of several nearby gold treatment plants. Metallurgical tests conducted by the Company have established that the ore is also amenable to heap leach treatment.
Following the completion of Whittle pit shell optimization studies for the Centenary, Buffalo and Spring Hill gold deposits, with positive results for all three pits, Minecomp Pty Ltd were engaged to generate pit designs, life-of-mine schedules, cash flow projections and preliminary ore reserve estimates.
The project management plans for both the Buffalo and Centenary mines and flora and fauna surveys were completed with the assistance of Keith Lindbeck & Associates and submitted to the DMP during 2013 and the mining proposals received approval.
In October 2013, Capital Mine Consulting (CMC) completed an independent review of the project’s economic feasibility based on production parameters, the Company’s budgeted costs including quotes obtained from independent mining and cartage contractors and other proposed suppliers. CMC’s report was received during the quarter and this broadly supported and confirmed the Company’s projections, noting that “although relatively small, the Parker Range Project appears to have positive economics and the completion of the recommended work could further enhance project robustness”.
CMC reported that further work could enhance and extend the gold inventory at Parker Range and the project’s robustness and noted that historical mining at Centenary recovered average grades of 16g/t, suggesting potential for a high grade core
In January 2014, notwithstanding the above and the advanced stage of DMP approvals process, the Company announced that, after careful consideration of the recent decline in the gold price and other factors, mining studies had been temporarily suspended “until the gold price recovers at least to levels prevailing in 2012”.
At the time of suspension, the mine project management plans had received DMP approval but the Company’s consultants had, at that point, failed to satisfy the DMP Environment Group with the design of the abandonment bunds.
In late 2016, in the light of the significant increase in the AUD gold price, an upward revision in the Buffalo Mineral Resource estimate carried out by the Company’s resource geologist and reductions in budgeted operating costs, MineComp were requested to update the Parker Range studies. With renewed optimism, discussions have recommenced with toll treatment plant operators and experienced miners who specialize in developing and mining small deposits and these discussions have reached an advanced stage.
The Company is considering options for a mining joint venture or similar commercial arrangement or, alternatively, the Company could consider raising the capital to develop and mine the deposits itself.
Gold exploration prospects
Exploration tenements, including the Toomey Hills Group and part of the Northern, Dulcie and Eastern Groups, have been disposed of to reduce exploration commitments. Exploration has continued on remaining exploration interests at Parker Range.
Parker Range Gold Exploration
A recent historic soil data compilation identified multiple gold in soil anomalies within open file reports A39388 (Spring Hill), A50319 (Star of the Range to White Horseshoe) and A50319 (Buffalo). During the second half of 2016, anomalous gold areas were infill soil sampled at Buffalo East, Mopoke North/South, Gordon Highlander, White Horseshoe, Star of the Range and Black Cat prospects.
Figure 2: Gold in soils grid from shallow auger digitized from A39388 and A50319
During 2016, extensive infill soil surveying programs have been completed in the Company’s Parker Range tenements, with gold-in-soil samples taken from a depth between 0.2m and 0.3m (see figure 3). The soil samples were not sieved but comprise of whole rock, soil and laterite pisoliths approximately 1kg in weight. Some graphitic sulphidic sediment outcrops were sampled for carbon content and multiple pegmatite outcrops were rock chipped for lithium content.
Figure 3: Soil Geochemical survey areas 2016
Gold-in-soil samples assays will be used for drill planning, focusing down dip (to the west) of the Black Cat underground, the Black Cat laterite and the Star of the Range laterite mine.
A recent review of the Star of the Range area shows that the historic 1990 mining and exploration did not cover the area immediately south of the Star of the Range mine and north of the Black Cat underground mine. This is because, at that time, the Star of the Range miners did not own the old Black Cat tenement which is now part of Gondwana’s tenement holdings.
Black Cat is located at an inflection in the magnetics and mapped in earlier Mines Department bulletins as 3 x BIF units bending at that location. A steeply plunging quartz vein similar to Centenary may exist in-between the iron rich amphibolites, A depleted sulphide zone will be leached near the surface along the eastern BIF as it has enriched the remnant relict laterite.
Figure 4: Gold sample location Black Cat to Star of the Range on satellite with topographic features
The Star of the Range and Black Cat gold mine laterite pits show extensive oxidization of an altered amphibolite, which developed after intense shearing of the mafic host. Gold in soil mineralisation is likely continuous between the 2 pits, and under the cross cutting alluvial drainage channel (through the centre of the soil survey) which drains into the salt lake. Remnant exposures of laterite are all that remains of the relict soil terrain, some of which was mined prior to 1982 and the rest in 1992. Multiple quartz lodes were injected along shear zones between the stacked BIF units and although small in tonnage, some do have bonanza +80g/t gold grades.
A gold in soil anomaly was historically mapped in A22398 (Star of the Range Annual report for M77/55 & M77/56 Nov 1987) with good shallow drilling results in laterite pits, but not across the Black Cat area. A deep target zone is down dip of multiple outcropping drag folded BIF units at Black Cat. In the stopes of the Black Cat underground, tightly folded units suggesting a deeper gold target exists down plunge in the fold nose not reached in the area’s historic shallow drilling.
An airborne EM survey is still to be conducted for sulphide detection down dip prior to finalising the planned RC drill hole program design.
The 1940 geology map (GSWA Bulletin 99) shows three kink folded BIF’s and a single 45° angled Black Cat underlay shaft, located west of the existing small laterite pit on the tenement boundary. Late stage gold bearing quartz lodes (such as Black Cat) can withhold their gold once oxidised, unlike the larger tonnage sulphide lodes which get depleted as gold remobilises to the surface. Bulletin 99 discusses geological examination of the Black Cat underground during mining “No work has been carried out to any great depth, because the ore bodies have pinched to stringers with a flattening in dip. It is likely that the dip will steepen again and the ore shoots will gradually attain their original dimensions. For this reason, prospecting below the known ore shoots is recommended, taking into account their pitch.” After careful examination of the Black Cat underground mine during operation (pre WWII), it was noted the “ground water is at 144ft vertical depth” which shows the depth of probable gold depletion from near surface oxidisation and “two ore shoots, which pitch steeply to the south east, are being mined and the main shaft is sunk between them” which is opposite the BIF dip and suggests a brittle deformed host.
Recommended in 1940 was to underground drive northwest and southeast along the BIF strike as new shoots will “probably be disclosed”, but only where the main underlay shaft dips change from 45° to 52°. The main underlay shaft changed steepness at 93ft (down shaft) to 143ft (down shaft) when the underlay shaft returns to a 45° dip to 200ft (down shaft) or 144ft V.D. Changes in BIF dip have resulted from folding on a horizontal northwest-southeast axis, and could repeat at depth.
The local steeping in the BIF dip has influenced the quartz deposition, plus there is a pronounced fold in the 3 BIF’s outcropping, with the fold nose area down dip still to be investigated. The 400m long Black Cat target zone identified on the new soil survey map is untested past 144 ft V.D or 44m vertical depth indicated in the 1940 report. The 400m long Star of the Range target zone identified with the new soil results is untested past the water table depth too.
At Black Cat a tightly spaced RC drill program is being design to drill across all 3 BIFs, to target at depth the steeply plunging quartz veins in fold hinges between each BIF unit.
Planning of deeper RC holes down dip to the west of the 800m long gold in soil anomaly will target large tonnage dipping conductors for gold mineralisation, if mineralisation is similar to the Buffalo deposit in the north of the tenement over a target strike length of 100m – 200m. The soils have been contoured together with previous mine area contaminated soils removed, highlighting five gold targets.
Figure 5: Black Cat Gold Target Zone is 400m long and Star of the Range Gold Target Zone is 400m
Cross cutting veins “in a pressure shadow” dipping SE are perpendicular to the SW dipping BIF and amphibolite host indicate brittle fracturing from southern tenement boundary to SOTR mine. The folded BIF at this location is changing dip and plunge due to the compression creating a kink fold, with a possible radial brittle deformation later infilling with 1-2ft wide quartz vein sets.
Drilling of three other gold mines along the same BIF hosted geology (at Centenary, Buffalo and Spring Hill) showed up to 4 stacked BIF units with them all carrying varying amounts of gold. Gold mineralisation is often enriched in the central and eastern BIF units, closest to the granite dome upwelling. At Centenary quartz rich shoots plunge down the main asymmetric fold void created during folding of the BIF, from horizontal N-S movements along the shear zone around the dome.
Many Parker Range gold deposits have higher grade and higher tonnage mineralisation below the depletion zone, where fresh pyrrhotite sulphide mineralisation is located. The gold sulphide ore is formed within a proximal shear zone parallel to the granite dome. The gold rich sulphide mineralisation is usually at the centre of a major shearing system and often adjoins a distal shear zone on sheared margins, creating amphibolite magnetite alteration along the belts entire strike length.
White Horseshoe mine survey
Gold in soil assays show a relict laterite ridge to the south east of the White Horseshoe mine in the drainage direction towards the salt lake. The low gold tenor of 0.1g/t indicates this laterite is only weakly mineralised, although still warrants some shallow drill holes though the centre of the +0.1g/t gold in soil anomaly to confirm higher gold grades don’t exist below the soil samples 0.3m depth.
This laterite is possibly secondary erosion from the White Horseshoe mine area or a redox front from an earlier east trending drainage channel, which has now etched southwards around the gold in soil anomaly causing a 2m raised 200m long laterite outcrop. Gold enrichment within a 1-2m thick laterite zone located below a 0.5m depleted surface laterite might still exist requiring shallow drilling to ascertain if there is any small tonnage laterite zones containing over 0.5g/t for heap leaching.
Gordon Highlander mine survey
At the Gordon Highlander historic underground mine, approximately 300m south of Spring Hill workings, the southernmost hole during the 2010 RC program intersected 3m @ 1.01 g/t from 14m down hole depth and 5m @ 1.97g/t from 23m depth in hole 10SHRC014.
Figure 6: Gordon Highlander mine has multiple high grade soil assays within +0.3g/t areas
The 2010 drill intersect is up-dip from a previously drilled 2008 RC exploration hole (SHRC08015) which intersected 5m @ 1.57g/t from 36m depth. The best RC results at Gordon Highlander are:
SHRC08015 : 26m to 32m 6m @ 0.83 and 36m to 41m – 5m @ 1.57
10SHRC014 : 14m to 17m – 3m @ 1.01 and 23m to 28m – 5m @ 1.97g/t
Detailed gold in soil assays taken to the north and east of the Gordon Highlander historic workings show +0.3g/t gold anomalism from the Spring Hill mine area to the Gordon Highlander mine because the mineralised BIF outcrops there containing up to 1.637g/t in soils. There is also a small anomaly to the east off the main zone however that could be contamination. The area to the south east of the BIF has no further anomalies although there are cultural disturbances in this area.
A second soil survey will be designed for later in 2017, to outline the end of the anomalous gold trend south west of Gordon Highlander up to the main road. This soil data will be used to orientate further infill RC drilling down dip and along strike to the south west of the Gordon Highlander shaft.
Mopoke north and south survey
The Mopoke North quartz vein has been drill previously tested and a review of the drilling effectiveness shows additional holes are required. This drilling was performed in 2010 and the two holes showed 1m gold intersects up to 0.9 g/t, but they were very shallow and do require deeper holes to test veins below oxide level. The +0.3g/t soil gold anomalism survey extends 100m to the north of the quartz vein outcrop and further drill holes are being designed to test north of the outcrop area.
Buffalo East survey
Historic drilling within Wamex report A25941 shows a small zone of enrichment in the corner of the Centipede, Buffalo and Mopoke tenements. This mineralized area is located in shallow laterite around the margin of the salt lake where the hyper saline water encroachment towards Buffalo. This EM conductive high is shown on the company’s 2010 V-TEM AEM data as high conductivity on all channels, with the underlying geology changing to more ultramafic at the location.
Secondary gold deposition is an important style of gold mineralization above or near to primary ore zones such as at the Golden Virgin pit north of Buffalo, which enriches near the surface because of the salt water interaction with the primary mineralisation. Shallow drilling is required south of the existing cleared drill line, to ascertain if this is primary or secondary mineralisation.
McIntosh to Raven Mine survey
The McIntosh area was infill soil sampled in early 2016. Results of this survey have been analysed and highlight the Raven laterite area east south east of the old Raven underground mine as a priority drill target. Only shallow drilling has been previously undertaken across the BIF at this location.
This lateritic gold mineralisation appears to be continuous downhill towards the salt lake and is coming directly from of the eastern side of the Raven underground shaft. This data identifies the eastern BIF of Raven could be similarly to Centenary which has a depletion zone down to 40m. As shown at Centenary to the north of Raven, the eastern BIF is heavily leached of gold in the top 40m making Raven’s eastern BIF a priority drill target at depth. RC drilling is planned to test the down plunge and down dip mineralisation at Raven because historic drilling wasn’t deep enough.
Figure 7: Centenary to McIntosh infill soils – target east of Raven is continuous to lake
A number of 1990’s vintage soil survey/auger program anomalies were infill soil surveyed during 2016. This soil analysis has revealed high priority gold drilling targets at the Black Cat mine, Star of the Range mine, Gordon Highlander mine, and Raven Mine.
Secondary gold drilling targets are evident along the shear zone north of McIntosh, Mopoke North quartz vein and Buffalo East laterite area.
FORRESTANIA / MT HOLLAND
The Forrestania/Mt Holland project (exploration licence application) contains an unmined gold-bearing laterite, from an historic prospect referred to as the Blue Turtle prospect. No drill logs can be located but the drill locations are noted on plans.
WAMEX report A24752: Blue Turtle Annual report on Mt Holland E77/23 1988; Author Metals Exploration Ltd refers in the text to primary gold mineralisation at the Blue Turtle prospect up to 3m @ 6.6g/t from 9m with 3 to 6m of laterite pisoliths above grading up to 1.28g/t.
Shallow drilling on 100m spaced lines either side failed to delineate any continuity. In this area, depletion zones combined with near vertical gold shoots in the unweathered basement are often beneath near-surface oxide mineralisation, and it appears no deep RC drilling has been undertaken at this prospect. Multiple E-W trending dykes at this location have disturbed the N-S stratigraphy and mineralisation may be locally folded or remobilised, so could be trending oblique to the E-W drill lines. Gold mineralisation could potentially be around 150m in strike and may be related to a vertical or sub-vertical plunging shoot.
Gobbo’s Copper-Molybdenum Prospect
This tenement contains the Gobbo’s copper/molybdenum prospect and the Cyclops nickel prospect. The Company entered into an agreement with Lepidico Ltd (formerly Platypus Minerals Ltd: ASX:LPD) to farm out tenement E45/3326 on the following terms: –
- Lepidico to sole fund $500,000 on exploration within 3 years to earn a 51% interest, Gondwana retaining 39% and Adelaide Prospecting Pty Ltd (APPL) 10%. Lepidico has advised that it has since expended the required amount and has earned its 51% interest.
- Option to sole fund a further $500,000 on exploration within a further 3 years to earn an additional 24% interest, with Gondwana retaining 15% and APPL 10%.
- Subsequent expenditure would be on a pro-rata basis by Lepidico and Gondwana, subject to dilution by industry standard formula. APPL would remain free carried to completion of a feasibility study.
- Should any party’s interest fall below 5%, then that party’s interest would convert to a 2.5% royalty on gross sales on all metals produced from the tenement.
- At any time after Lepidico has earned its 75% interest, Gondwana has the right to convert its remaining interest to a 2.5% royalty on gross sales on all metals produced.
Lepidico has announced significant reconnaissance drilling intercepts of copper, molybdenum and tungsten, and rated Gobbos as an outstanding unexplored prospects. However, Lepidico has announced it is looking to dispose of its interest in the Gobbo’s Prospect to focus on other interests.
Nullagine Gold Prospect (E46/1026)
Nullagine gold project (EL46/1026) is considered prospective for mineralisation similar to that found at Millennium Minerals’ Nullagine Gold Project, which holds a 31.76M tonne resource at 1.3g/t for a total of 1,280,400oz, (Millennium annual report 2016). Gold has also been mined from along the Blue Spec Fault, east of Gondwana’s project. Historical drilling on the Blue Spec Fault indicates gold mineralisation extends over a 5km strike length, with gold being hosted in or adjacent to near vertical quartz veins.
The company has completed a data review and an initial field exploration program. ASTER imagery and an interpretation report was acquired from Geoimage Pty Ltd. Fieldwork included mapping of accessible areas and collection of 105 rock chip samples, with the best Gold, Arsenic and Copper results below:
|GN040||Grey sandstone with lots of silica flooding and QZVNs||210529||7582439||0.31||53||9|
|GN076||Quartz vein which includes pyrite grains that have been altered to haematite, vein surrounded by silicified basalt||206661||7596183||0.16||68||60|
|GN083||red very altered fine grained basalt||205394||7596723||0.01||57||220|
|GN100||white red banded siliclastic||202404||7597450||<0.01||97||213|
Figure 8: Tenement outline, major faults and the Blue Spec Mine location
(Millennium Minerals current mine areas extend across the area south of this plan)
Interpretation of the geology, the 2017 rock samples and the 2017 geochemical assays, coupled with a review of the complex mineralising mechanism of the Blue Spec Fault, has resulted in definition of two previously unknown and untested areas of interest.
The project is considered prospective for gold mineralisation for the following reasons:
- Correct sequence of geological units (as identified by Millennium Minerals) including the Mosquito Creek Formation.
- Correct regional structural setting, which includes the Blue Spec Fault and parallel fault zones
- Historical drilling intersected >5km strike length of gold anomalism (to the east of E46/1026)
- Complex local structural setting faults that may provide ideal hosts for mineralisation.
- Presence of mafic dolerites/gabbros.
- Anomalous gold results indicate mineralising fluids have been present within the tenement.
The work program indicates the Nullagine project has potential to host significant gold deposits in the following settings:
- A series of disconcordant (with respect to stratigraphy) vertically stacked quartz, pyrite reefs systems and quartz stockwork
- Discordant veins internally within the Blue Spec Fault
- Two anomalous gold results indicating that mineralising fluids have been present within the tenement.
A follow-up programme will now be designed andimplentation in early 2018.
Other Pilbara tenements
The Company has retained a 90% interest in exploration licence E45/3956 (Comet East prospect – granted on 7 August 2017), which is considered prospective for gold.
IMPORTANT NOTE RE PARKER RANGE GOLD PROJECT ORE RESERVES
As the Company has not yet completed its formal Pre-Feasibility Study, no Ore Reserve estimate can yet be completed or announced. References to Ore Reserves in previously released reports are hereby withdrawn.
COMPETENT PERSON STATEMENT – EXPLORATION RESULTS
The information in this Report that relates to Exploration Results is based on information compiled by the Company by Mr Grant Donnes, a competent person who is a Member of the Australian Institute of Geoscientists. Mr Donnes has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (“JORC Code”). Mr Donnes consents to the inclusion in this Report of the matters based on his information in the form and context in which it appears.
COMPETENT PERSON STATEMENT – MINERAL RESOURCES
The information in the Independent Geological Report that relates to Exploration Targets, Exploration Results or Mineral Resources is based on information compiled by the Company and reviewed by Malcolm Castle, a competent person who is a Member of the Australasian Institute of Mining and Metallurgy (“AusIMM”). Malcolm Castle is a consultant geologist employed by Agricola Mining Consultants Pty Ltd. Mr Castle has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (“JORC Code”). Malcolm Castle consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
Malcolm Castle’s review is based on information compiled by Mr David Hollingsworth, a consultant of the Company, who has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity to undertake the resource estimates and Mr Hollingsworth consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
MINERAL RESOURCE ESTIMATES
Malcolm Castle of Agricola Mining Consultants Pty Ltd was commissioned by the Company to provide an updated Independent Review of the Resource Estimation for the Parker Range Gold Project in Western Australia, and he submitted his Report in October 2015. The Mineral Resource Estimates are set out below.
Refer to the Competent Person Statement above.
|Resource Category||Tonnes||Grade||Cut ounces*|
*Average grades are reported at 0.5g/t cutoff
|Tenement||Application||Granted||Status||Third Party Interest|
|East Pilbara Projects, WA|
|Gobbos and Cyclops Projects|
|E45/3326||10/10/2008||21/01/2011||Granted||Adelaide Prospecting 10%* Platypus Minerals earning 75% pursuant to farm-in agreement|
|Comet East & Nullagine Projects|
|Parker Range Projects, Southern Cross WA|
|Parker Range Gold Project|
|M77/893||10/12/1997||3/01/2001||Granted||Cerro Resources NL 30%*|
|M77/52||26/06/1984||27/06/1984||Granted||Cerro Resources NL 30%*|
|M77/562||9/07/1992||23/10/1992||Granted||Barclay Holdings 30%*|
|M77/561||9/07/1992||23/10/1992||Granted||Barclay Holdings 30%*|
|L77/0264||5/09/2013||7/01/2014||Granted||Miscellaneous licence for road realignment|
|* Free carried to feasibility study|
|Parker Range Exploration|
|P77/4375||15/08/16||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/4376||15/08/16||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/4377||15/08/16||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/4378||15/08/16||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/4379||15/08/16||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/4380||15/08/16||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/2425||23/01/17||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/4418||23/01/17||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/4419||23/01/17||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/4420||23/01/17||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/4421||23/01/17||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|P77/4422||23/01/17||–||Pending||Earning 51% (holder: Emu Fence Exploration P/L)|
|Forrestania/Mt Holland Project|